Global

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  • Service: Tax, International Corporate Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 6/22/2012

Italy - Tax relief to banks to be recovered 

June 22:   The Court of Justice for the European Union (CJEU) issued a judgment finding that a plan for realignment of the banking sector, adopted by Italy in 2004, was “illegal state aid” which must be recovered from the banks. BNP Paribas and Banca Nazionale del Lavoro Spa (BNL) v. Commission C- 452/10 P (21 June 2012)

At issue were measures that allowed public banking entities to change their legal form into that of joint stock companies, but only 15% of the capital gain realized on the transfer of banking assets was subject to tax at the normal rate of corporation tax.


The Italian government admitted that the plan conferred a tax advantage on banking entities—one that was not available to other companies.


As explained in a release 82/12 [PDF 53 KB], the CJEU agreed the General Court that the tax relief in favor of banking entities was not justified by “the inherent logic” of the Italian tax system. Thus, because the relief constituted state aid that was incompatible with the common market, such aid must be recovered from the recipient banks.




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